Peabody receives investor interest

Peabody has confirmed that a number of highly qualified potential investors have expressed interest in pursuing an ownership position in the Navajo Generating Station for operation beyond 2019, meeting a major milestone for identifying a new ownership structure.

The ownership transition process remains on track.

"The Navajo Nation is committed to engaging in negotiations as this important process continues," said Navajo Nation President Russell Begaye. "The Nation is encouraged by the expressed interest of potential owners as the process moves forward."

"We are pleased with the robust response to the plant's ownership transition process to date," said George Bilicic, Lazard Vice Chairman and Global Head of Power, Energy & Infrastructure who is leading the process. "In the next phase, we will continue an intense focus to develop a new ownership structure, working toward a final selection of investors and negotiating definitive agreements by the end of the first quarter of 2018."

"Lazard believes the Navajo Generating Station is a critical resource in the region for power generation and resource diversity, and from a total regional economic impact perspective. Lazard took on this project because we believe there will be an optimal path forward that solves the needs of the many stakeholders involved, including the Navajo, Hopi and ratepayers in Arizona," Bilicic said.

The development of the Navajo Generating Station was authorised by Congress and serves as a stable, affordable power source to move water across the state for the Central Arizona Project. The plant was sited on tribal lands, using Navajo and Hopi energy resources to create tribal jobs and revenues, helping the government fulfill its trust responsibility. It was commissioned to run 75 years through 2044.

The plant historically has been among the most efficient coal plants in the Southwest and is consistently among the highest dispatching coal plants in the region, except for a brief period in 2016 when natural gas prices hit a historic low. Natural gas prices have since rebounded back to higher levels.

"The recent spike in Southwest power prices caused by high demand periods and higher natural gas costs demonstrates why the Navajo Generating Station and coal continue to be an essential component of a reliable, resilient and cost-effective energy portfolio for Arizona," said Kemal Williamson, Peabody President – Americas. "We will continue our efforts to make the plant among the lowest cost, most competitive baseload power plants in the region."

Fuelled by Peabody's Kayenta Mine, the Navajo Generating Station began operating in 1974.

"The Hopi have offered our land and energy resources to fuel the Navajo Generating Station for more than four decades," said Hopi Tribal Chairman Herman Honanie. "We've used our energy resources to provide for Hopi people, and we are proud that the benefit of our energy is spread far beyond Hopi Mesas. It is important to keep the plant operating for the tribes and the entire state, and we'll continue to be part of this effort."